EC mobile roaming cuts spark fury

Mobile operators condemn proposed price caps

Mobile phone operators in the UK have reacted with shock and dismay today, as EC regulatory proposals that will slash the cost of mobile calls by up to 70 per cent for roaming in Europe took a major step closer.

Operators lined up to condemn the proposals, which could see mobile phone charges for making and taking calls plummet across the EU this summer.

The proposals, which the EC claims could save EU consumers up to 5 billion Euro (£3.35 billion) a year, were approved in a key vote today by the Industry Research and Energy Committee of the European Parliament. A full parliamentary vote on the proposals will now take place in May and caps could be implemented this July.

Although yet to be finalized, the EC proposals recommend a cap of 0.40 Euro (27p) per minute for calling home from an EU country and 0.15 Euro (10p) for receiving a call when abroad (prices exclude VAT).

Commenting on this morning's vote, EU Telecoms Commissioner Viviane Reding said: "Loudly, the bell is now tolling for international mobile roaming charges in Europe....this last border in the EU's internal market, still visible for the moment on most consumers' mobile phone bill, is now bound to disappear very shortly."

No justification

However, mobile operators were far from welcoming. Speaking to Tech.co.uk, a Vodafone spokesperson questioned the justification for the level of the proposed caps .

The spokesman described the moves by the EU as "Far more extreme than anything proposed the European Parliament or EU Council of Ministers," and which went against the European Parliament's own independent study proposals.

"You would think that with proposals this extreme they would provide extensive justification," the spokesperson said, "but there is no explanation forthcoming for fixed prices at this level".

The Vodafone spokesperson also condemned the timing, saying it could cause chaos for customers and could mean customers using its Vodafone Passport roaming scheme could end up paying more for roaming calls under the proposals.

Inappropriate and unprecedented

The GSM Association , the global mobile industry trade association, took a swipe at the EC proposals, condemning them as "inappropriate and unprecedented on the basis of the principles of a market economy".

It claimed the European mobile market would be "seriously harmed" by the proposals and would damage competition. It echoed the concerns expressed by Vodafone about potentially penalizing customers on existing roaming schemes.

O2 also hit out the inflexibility of the EC's plans: "The EU doesn't appear to address the fact that consumers don't all travel on mass at the same time, they want flexibility, and there's a real danger that some could be penalised as a result," a statement from the company claimed.

"That said, we support the EU's move to further reduce wholesale tariffs... but competition and market consolidation are driving down retail charges not regulatory intervention."

T-Mobile too claimed the regulatory moves were unnecessary: "We need to review the European recommendations in detail but in principle, we believe that a competitive market-place will ensure the best results for consumers and that regulation is not necessary," it said.

Welcome changes

However, UK mobile operator 3 - which is likely to suffer less revenue loss from the caps - was more positive about the moves: "3 welcomes the latest European Parliament vote in support of capping wholesale mobile roaming charges, we agree that roaming prices have been too high and we want to see them come down."

Each UK mobile network does offer their own opt-in discount schemes for customers when they are roaming internationally with their phone but typical standard prices for customers who are travelling abroad are still between 30p and 90p per minute.

The EC has calculated that mobile operators make around 8.5billion Euros (£5.7billion) from international roaming charges, and that their proposals could save consumers 5 billion Euros (£3.35 billion).